City Savings to get full control of PR Savings Bank

City Savings Bank Inc. CONTRIBUTED PHOTO/www.aboitiz.com

City Savings Bank Inc. (CSB), the thrift banking arm of Union Bank of the Philippines, will attain full control of Philippine Resources Savings Bank (PR Savings), a 102-branch thrift bank based in Isabela, with a deal to buy out the preferred shares held by the International Finance Corp.

In a disclosure to the Philippine Stock Exchange on Monday, UnionBank said CSB had signed a share purchase agreement with the IFC, which owns 65 million preferred shares equivalent to 33.73 percent of PR Savings’ capital. The deal was priced at P12.88 per share for a total block price of P837.2 million.

“The acquisition is in line with the company’s goal to expand its mass market reach consistent with its vision to promote inclusive growth in the country,” Union Bank said.

PR Savings Bank is a member of the ROPALI group of companies. It is presently engaged in extending motorcycle, agri-machinery and teachers’ salary loans.

The transaction will be subject to closing conditions, such as the approval of the Philippine Competition Commission and Bangko Sentral ng Pilipinas.

The deal will allow Union Bank to indirectly own an additional 33.73 percent stake in PR Savings Bank through CSB.

Earlier, CSB signed a share purchase agreement to acquire 100 percent of the common shares of PR Savings, representing 66.27 percent of the outstanding capital. The controlling stake was bought from the ROPALI group of companies, a mid-sized conglomerate which is a leading player in the motorcycle and agricultural machinery trade.

The buyout of preferred shares held by the IFC allows CSB to attain 100 percent control of the savings bank.

PR Savings is the 14th largest thrift bank in the country, with assets of P12.917 billion. Its 102 offices are mostly located in Luzon. The bank extends motorcycle, agri-machinery, and teachers’ salary loans, serving over 131,000 borrowers, mostly from the mass market segment.

The acquisition is seen to present “exciting” new opportunities for CitySavings to substantially expand its reach in Luzon, as well as enter new market segments such as motorcycle and agri-machinery financing, Union Bank said in the disclosure.

This is also seen in line with the BSP’s efforts to improve financial inclusion in the country and strengthen the banking industry through mergers and consolidation.

For its part, CSB is the fifth largest thrift bank in the country in terms of assets, with P74.44 billion in resources as of June 30, 2017. It provides a range of mass market finance products and services, such as salary loans to public and private school teachers, pension loans to Government Service and Insurance System (GSIS) and Social Security System (SSS) pensioners, overseas Filipino worker loans, and traditional deposit products. It has 106 offices across the country.